Generally, in a corporate environment, goods purchasing may be broken down into three parts. First, a requestor (within the company) may require a piece of equipment that is not on hand in order to continue work. Next, the requestor will request the piece of equipment from a central purchasing (processing) group. Finally, the central processing group will make the purchase from a specific supplier and the desired piece of equipment will be delivered. In most cases, the supplier will be paid via terms outlined in a purchase contract; normally, after the equipment has arrived.
However, in some situations, a hold may be placed against the payment to a supplier due to payment issues which arise from the terms of a purchase contract. For example, a suppliers' payment may be placed on hold if an incorrect invoice number was used on the bill or if the invoice was filed under the wrong purchase order (PO) (either by supplier, requestor, or the central processing group).
Normally, the resolution of a hold payment usually requires some type of dispute resolution. A typical dispute resolution is outlined in FIG. 1. Specifically, system 100 illustrates the three main players and the actions taken in resolving a payment dispute. In many cases, a supplier 130 will call a central processing facility 110 in order to establish the status of a specific payment, or set of payments which have not been received. Central processing 110 may then contact a requestor 120 to find out the status of the delivered goods for which supplier 130 is requesting payment thereof. Requestor 120 will then answer the question posed by central processing 110 thereby allowing central processing 110 to resolve the payment hold and pay supplier 130.
However, one problem with the current payment resolution environment is the sheer size of both requestor 120 and supplier 130 in comparison with central processing 110. For example, it is not uncommon in an average size company for requestor 120 and supplier 130 to submit tens of thousands of invoices on a per anum basis. Furthermore, it is not uncommon for central processing 110 to include only 15 individuals ranging in skills from clerk, to corporate purchaser, to corporate buyer, to manufacturing buyer. Therefore, it is easy to recognize that the choke point in the entire payment dispute system 100 is central processing 110. Specifically, even with the best central processing 110 workers working around the clock, the deficit in personnel-per-conflict may be insurmountable.
In many cases, due to the size of the choke-point or the type of payment hold, the resolution may not be so simple nor may it be as swift as described herein. For example, if the payment hold is a complex issue (e.g., PO overcharged, etc.) a simple phone call from central processing 110 to requestor 120 may not resolve the issue. In fact, there may be a need for follow-up calls, e-mails, and/or paperwork between requestor 120, central processing 110 and supplier 130 in order to completely resolve the payment hold and allow supplier 130 to receive payment.
Therefore, one method that is used for increasing the efficiency with which payment holds are resolved is to allow requestor 120 (but not supplier 130 due to company security reasons) to receive the disputed invoice (or group of invoices if it is a PO issue) for analysis. Thus, requestor 120 may try to resolve the issue for supplier 130 by sorting through the data to find the clerical error.
One deleterious effect of this method of payment resolution is that requestor 120 may not be trained in the clerical arts utilized by central processing 110 or supplier 130. Therefore, requestor 120 may spend an exorbitant amount of time trying to understand a single issue while never being privy to the big picture. Furthermore, requestor 120 may have a schedule which does not allow for the amount of time required to study an invoice, proof it for errors, check for possible PO issues between invoices, and the like. Thus, the frustration for supplier 130 will grow, the inconvenience for requestor 120 will grow, and the bogging down of central processing 110 will also grow.
Furthermore, due to the possible complexity of the payment hold issue, supplier 130 may become so frustrated with the slowness of the payment resolution that it may limit interactions with the company or ally itself with a competitor. In many cases, when the situation becomes this desperate, a company may authorize central processing 110 to pay supplier 130 a lump sum to cover outstanding payments. This resolution may be even more deleterious if the company pays a lump sum to cover a specific portion of outstanding debt and the supplier credits the payment to a different portion of outstanding debt, thereby resulting in more argument and further confusion.